Going against the Flow of China's Dominant Societal Logics: A Case Study of the Sichuan Furniture Industry

By Koch, Bradley J. | International Management Review, January 1, 2010 | Go to article overview

Going against the Flow of China's Dominant Societal Logics: A Case Study of the Sichuan Furniture Industry


Koch, Bradley J., International Management Review


[Abstract] Societal logics are the belief systems and organizing principles that shape strategic action within a society. I identify four dominant societal level logics in China via an inductive analysis of news articles and then examine the Sichuan furniture industry for the presence of these logics to determine the extent to which these four logics shape the institutional field. It is argued that these logics are not present in the Sichuan furniture industry due to the actors lacking political, economic and social power to invoke the societal logics to their advantage.

[Keywords] Institutional theory; institutional logics; China; furniture industry

Introduction

A shortcoming of the business system and neo-institutional paradigms is that they rarely establish important macro-micro linkages across different levels of analysis that highlight and explain deviation from the ideal types of dominant institutions (Casper, 2000; Weber & Glynn, 2006). The business system's approach primarily focuses on processes by which a nation's formal political and economic institutions structure economic organization. Variation in a nation's historical, social, and cultural factors results in a divergence of capitalistic systems across nation-states (Whitley, 2000). The neoinstitutionalism approach typically focuses on common beliefs and shared logics of action within an institutional field (i.e. industry) and analyzes variation that occurs within the industry over time. The weakness in both of these approaches is that they often fail to establish macro-micro linkages to identify and explain divergence from the dominant ideal types.

Analysts within the business system paradigm typically do comparative analysis of differences between nations' capitalistic systems without much focus on those industries that run counter to the nation's ideal type of economic organization. Similarly, analysts from the neo-institutionalism paradigm begin by focusing on the institutional field of a particular industry and then use a post-hoc analysis to argue that it is embedded within the broader society and, thus, overlook the existence of institutional fields that are incongruent with and not embedded in the society's ideal type of cognitive frames and organizing principles.

Although these weaknesses are somewhat inherent in the level of analysis chosen by researchers, I attempt to reduce these weaknesses within the neo-institutional paradigm by first identifying the shared logics of action at the nation/society level and then examine the Sichuan furniture industry that exists outside of these dominant societal logics. This paper adds to the neo-institutional and business system literature by further analyzing industries that deviate from the dominant institutional ideal type. In addition the distinction between macro societal and micro institutional logics facilitates a means for envisioning alternative paths to different institutional arrangements.

In order to examine the macro-micro linkage between the society and a particular industry from the neo-institutional perspective, I begin by identifying and defining China's dominant societal logics, and then examining Sichuan's furniture manufacturing institutional field for the presence of the societal logics. The presence and absence of particular societal logics form the basis for the institutional field's logic, and, thus, its content. Finally, I conclude by speculating how different societal logics could have coalesced to create a very different institutional field.

Theoretical Basis for Societal and Institutional Logics

The key to developing a macro-micro linkage within the neo-institutional perspective is to distinguish between institutional logics at the industry level and the higher-level societal logics. Since the extant literature focuses on logics at the industry level that are labeled as institutional logics, I begin with this definition and a critique of the research that has been done on institutional logics before arguing for the conceptualization of societal logics that form the basis and the raw materials from which the lower-level institutional logics are constructed. …

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